Cholera toxin (CT), produced by Vibrio cholerae and the causative agent of the disease cholera, is a typical A-B toxin. The B subunit binds to ganglioside GM1 on the apical surface of the intestinal mucosal cell whereas the A subunit after being reduced to generate the A1 peptide, activates adenylyl cyclase on the basolateral surface. A1 is an ADP-ribosyltransferase that modifies the alpha subunit of the stimulatory G protein (Gs) of adenylyl cyclase, thus blocking its intrinsic GTPase activity and keeping the cyclase persistently activated. We have been investigating the detailed mechanism of cellular processing and activation of CT, using as a model human intestinal CaCo-2 cells, that behave in culture as differentiated enterocytes, the natural target for CT. We are particularly interested in events during the lag period between toxin binding and cyclase activation. We previously showed that the holotoxin binds to the cell surface with the A subunit facing away from the membrane and is internalized through caveolae. A portion of the toxin undergoes retrograde transport to the Golgi apparatus and the endoplasmic reticulum where the A subunit is reduced by protein disulfide isomerase to form small amounts of A1 peptide. It is unclear, however, whether ADP-ribosylation of Gs(alpha) occurs at or near the site of A1 formation or at the basolateral surface, thereby requiring further trafficking of A1 to the cyclase complex. To address this issue, we examined the temporal and spatial relationship between A1 formation, ADP-ribosylation of Gs(alpha), and adenylyl cyclase activation. Cells treated with CT at 4 C were washed, and warmed to 37 C for different times; then crude membranes were prepared and assayed. A1 peptide was detected within 20 min of warming whereas ADP-ribosylation of Gs(alpha) and activation of adenylyl cyclase were not detectible until 30-35 min, and both appeared to occur concurrently. Warming the cells to only 30 C increased overall activation times, but did not resolve the two events. Polarized cells grown in Transwell cell culture chambers gave similar results when CT was applied to the apical surface. Aqueous two-phase partitioning of the crude membranes showed that ADP-ribosylation and adenylyl cyclase activation occurred predominantly in the plasma membrane fraction and mirrored the time course observed with crude membranes. Our results indicate that A1 peptide upon formation must be transported to the cytoplasmic face of the basolateral surface to activate the adenylylcyclase complex.